House price inflation isn't only a worry for young urbanites - a frantic demand for holiday homes is putting the squeeze on rural first-time buyers too. Some say banning second homes is the answer.

What can you buy for £250,000? A decidedly modest home on the scruffier fringes of booming London - if you're lucky. But you won't exactly be swinging any cats in the sleepy Suffolk town of Southwold either.

Local homes, for local people

A two-bedroom house on Southwold's most popular street won't leave you with any change from a quarter of a million, beyond the means of many young locals in the old fishing community.

"That's not really fair," says 27-year-old estate agent Cheryl Chatfield. "People my age have to look elsewhere for homes. It used be a mile inland, but you have to go even further now."

So who is willing and able to meet such astronomical asking prices? Oddly enough it tends to be people who don't even want to live in the town - not at least all year round.

Ending weekending

The majority of buyers on Ms Chatfield's mailing list are looking for a second home. Already half of the houses in some streets fall into this category, standing empty for part of the year.

Southwold is not alone, and nor is the problem exclusive to seaside communities. Authorities in Exmoor national park are so concerned by the pricing out of locals and the dearth of fulltime residents, a virtual ban on second homes is being pursued.

But would you spend every day here?

Shutting out the "rich weekenders" has been mooted many times as a remedy to the rural woes of dwindling public services and closing businesses.

In areas such as north Norfolk, housing associations have long tried to secure sufficient homes for local needs ("But it's reached the point where they can't raise enough money to buy any more," says Margaret Cork, of the picturesque village of Cley Next the Sea).

In the 1970s, Welsh nationalists famously put holiday homes to the torch to dissuade would-be buyers.

Taxing times

During the current surge in house prices, tax regulations that favoured second homes have been scrapped, potentially doubling the bills for the UK's estimated 250,000 weekenders.

Environment Minister Michael Meacher (who by no means confines himself to a single home) even has spoken of the need for zones where second homes are prohibited. An idea described as "Soviet" by the opposition.

One home? Michael Meacher has more than half a dozen

However, the homeless charity Shelter has pointed out that the money second homers can injected into rural communities should not be ignored.

Local builders, decorators and estate agents (such as Ms Chatfield) all benefit for the second home boom. And while some villages have lost their banks, schools and post office stores, other employers have sprung up to meet the needs and tastes of weekenders.

John Miller, a fulltime Southwold resident and local councillor, says traders can make more than enough money in the summer (when the town's 1,200 population swells to 8,000) to see them comfortably through the quieter months.

Making hay

"In August, there are queues in the shops, the car parks are full and you can't walk on the pavement. Then they all disappear like swallows and we return to our dull, orderly way of life."

The emptying of the town in autumn may also be a passing phase. Many second homers are choosing to rent their houses out, while others plan to make the move permanently come retirement.

Sea view, convenient for the beach: £40,000

Mr Miller says houses are fetching "silly" prices (even tiny uninhabitable beach huts are going for £40,000), but locals wouldn't have it any other way.

"People would oppose any attempt to restrict them selling. Why? Because locals can sell their properties for riches beyond their wildest dreams, move inland and still have plenty left over."

Drastic measures may be beaten to the draw by the recent gloomy economic forecasts. Ms Chatfield reports that prices have levelled off in the past month.